Lazard: not like the other advisory shops (because you won't get paid)IB
If you ask people about what they think the elite investment banking advisory firms are (not bulge bracket banks), you will usually get a list that includes Greenhill, Evercore, Moelis, Lazard, Perella Weinberg, Centerview, Blackstone, Houlihan, etc. The one thing these firms don't have in common though: compensation at the junior levels.
In recent years it seems that Lazard had been paying in line with the lowest paying of the bulge brackets. Generally the past few years all of the other advisory only shops (and Lazard's closest peers) have paid more than bulge brackets.Understandable given that some of the bulge brackets just paid government bailout funds back in the past few years and the smaller shops had been taking market share in advisory.
This year things only got worse. Senior associates and junior VPs at Lazard were paid so little last winter that they made in some cases over $100K less than what their peers at other shops made. The analyst class this year on a relative basis looks worse as well. Top bucket for first years was 55 and top for 2nd was 65. First years at peer shops are getting more than 2nd years at Lazard. Their peers will be much higher (first year at BX was 30K higher than Laz last year).
The other thing that the "top" numbers at Lazard don't say compared to peers' comp is that other advisory shops have less buckets so their bottom vs. top bonus spreads are not as large; hence, the average vs. top spread will also be lower at peers.
So the intersting question is why? There has been talk in the media about Lazard compensation being persistantly higher than peers as a % of revenue (see Bloomberg article below). Laz persistantly pays junior people much less than peers, but somehow pays more of its revenue out as compensation. There are two possibilities: 1. The senior bankers at Lazard can't generate as much revenue per banker as their peers or 2. the senior bankers take so much more pay than at peers that even by paying junior people much less, overall compensation as a % of revenue is still higher at Lazard.
Either way if I were considering taking a job at Lazard I would want to know about this. IMO the implications of both possibilities above are 1. you will work with a bunch of B-team senior bankers who can't compete to generate as much revenue as senior guys at EVR, Moelis, Greenhill, etc or 2. the senior bankers will work you and underpay you so they can keep more for themselves. Lazard doesn't have a reputation for having bad senior guys from what I know, so 2 seems like the better possibility. Thoughts?